BIA Projecting 3.6 Percent Decline in Ad Revenue from 2019: A Look at Pre and Post COVID Estimates for Media

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A roaring economy, 2020 Summer Olympics, and political spending from a Presidential, Senate, and local elections all indicated a strong year for local advertising sellers. But then a pandemic struck creating economic havoc.

BIA lowered its advertising revenue forecast for 2020 to $144.3 billion, down 3.6% from 2019 levels and a 10.6 percent decrease from BIA’s prior estimate of $161.3 billion in November 2019. The one reason the overall decline isn’t greater is projected political revenue of $7.1 billion.

As explained by BIA’s chief economist Mark Fratrik, “To formulate the update to our local advertising estimates, we considered all the different angles of the economic impact of COVID-19 on the economy, including unemployment, local market-specific factors, and the declining ad spend of key business verticals.”

A realistic view of the virus is that it will continue to have a negative impact on the second quarter, with some continuation into the 3rd quarter.

For 2020, BIA is forecasting declines pretty much across the board among the 16 media categories in our forecast. Certain media channels will be harder hit than others, but some will actually show some growth over 2019 (albeit less than we originally forecast).

Among traditional channels, print media (Newspapers and Magazines) and Out-of-Home will be hard hit by COVID-19, facing double-digit losses from 2019.

Digital channels, particularly Over-the-Top (OTT), online television, mobile, and online/interactive, on the other hand, will see year-over-year growth. Over-the-air television, which will receive the largest share of 2020 political ad spending, will remain nearly flat from 2019.

BIA’s pre and post COVID-19 Forecast for ad spending across select media channels is detailed in the following chart.

Digging deeper, it’s clear to see how different verticals are affecting media:

  • Local Radio and Local Television both effected by decreased ad spend by Leisure and Entertainment, Restaurants and Retail companies, as well as sports cancellations.
  • Direct Mail impacted by a considerable decrease in ad spend by Retail and Financial companies.
  • Out-of-Home (OOH) outlets impacted by decrease in spend from Leisure and Entertainment companies, typically the largest advertiser for OOH, and from the decreased travel of commuters.
  • Online (desktop) ad spending is showing a significant decline because it’s largely driven by SMBs. Many of these businesses have sharply reduced ad spending due to service reductions, closures, sharply reduced sales especially for those businesses deemed “non-essential” by local and state governments.
  • Local cable systems are seeing a decline as the lack of live sports has affected their viewing and selling advertising time for companies that typically advertise on such programming.

BIA will be updating its forecast more than quarterly this year in order to stay on top of the effect of COVID on local advertising and to provide current assessments to the industry.

Download Free Report from BIA

BIA is offering complimentary analysis on its updated forecast and steps that will help companies prepare for the rebound on its new COVID Analysis page. Visit it now to also download the report, Advertising Revenue in the Uncertain COVID-19 Environment.

BIA ADVantage

BIA ADVantage subscribers can login to access updated ad revenue forecasts for their local markets across 95 verticals and to get more COVID related local selling strategies and analysis.

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